(1) In general. A creditor may not obtain or use medical information pertaining
to a consumer in connection with any determination of the consumer’s
eligibility, or continued eligibility, for credit, except as provided
in this section.
(2) Definitions.
(i) Credit has
the same meaning as in section 702 of the Equal Credit Opportunity
Act, 15 U.S.C. 1691a.
(ii) Creditor has the same meaning as in section 702 of the
Equal Credit Opportunity Act, 15 U.S.C. 1691a.
(iii) Eligibility, or continued eligibility,
for credit means the consumer’s qualification or fitness to receive,
or continue to receive, credit, including the terms on which credit
is offered. The term does not include:
(A) Any determination of
the consumer’s qualification or fitness for employment, insurance
(other than a credit insurance product), or other noncredit products
or services;
(B) Authorizing,
processing, or documenting a payment or transaction on behalf of the
consumer in a manner that does not involve a determination of the
consumer’s eligibility, or continued eligibility, for credit; or
(C) Maintaining or servicing
the consumer’s account in a manner that does not involve a determination
of the consumer’s eligibility, or continued eligibility, for credit.
(1) In general. A creditor does not obtain medical information in violation of the
prohibition if it receives medical information pertaining to a consumer
in connection with any determination of the consumer’s eligibility,
or continued eligibility, for credit without specifically requesting
medical information.
(2) Use of unsolicited medical information. A creditor that receives unsolicited medical information in the
manner described in paragraph (c)(1) of this section may use that
information in connection with any determination of the consumer’s
eligibility, or continued eligibility, for credit to the extent the
creditor can rely on at least one of the exceptions in section 1022.30(d)
or (e).
(3) Examples. A creditor does not obtain medical
information in violation of the prohibition if, for example:
(i) In
response to a general question regarding a consumer’s debts or expenses,
the creditor receives information that the consumer owes a debt to
a hospital.
(ii)
In a conversation with the creditor’s loan officer, the consumer informs
the creditor that the consumer has a particular medical condition.
(iii) In connection
with a consumer’s application for an extension of credit, the creditor
requests a consumer report from a consumer reporting agency and receives
medical information in the consumer report furnished by the agency
even though the creditor did not specifically request medical information
from the consumer reporting agency.
(1) In general. A creditor may obtain and use medical information pertaining to
a consumer in connection with any determination of the consumer’s
eligibility, or continued eligibility, for credit so long as:
(i) The
information is the type of information routinely used in making credit
eligibility determinations, such as information relating to debts,
expenses, income, benefits, assets, collateral, or the purpose of
the loan, including the use of proceeds;
(ii) The creditor uses the medical information
in a manner and to an extent that is no less favorable than it would
use comparable information that is not medical information in a credit
transaction; and
(iii) The creditor does not take the consumer’s physical, mental,
or behavioral health, condition or history, type of treatment, or
prognosis into account as part of any such determination.
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(2) Examples.
(i) Examples
of the types of information routinely used in making credit eligibility
determinations. Paragraph (d)(1)(i) of this section permits a
creditor, for example, to obtain and use information about:
(A) The dollar
amount, repayment terms, repayment history, and similar information
regarding medical debts to calculate, measure, or verify the repayment
ability of the consumer, the use of proceeds, or the terms for granting
credit;
(B) The value,
condition, and lien status of a medical device that may serve as collateral
to secure a loan;
(C)
The dollar amount and continued eligibility for disability income,
workers’ compensation income, or other benefits related to health
or a medical condition that is relied on as a source of repayment;
or
(D) The identity of
creditors to whom outstanding medical debts are owed in connection
with an application for credit, including but not limited to, a transaction
involving the consolidation of medical debts.
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(ii) Examples of uses of medical
information consistent with the exception.
(A) A consumer
includes on an application for credit information about two $20,000
debts. One debt is to a hospital; the other debt is to a retailer.
The creditor contacts the hospital and the retailer to verify the amount
and payment status of the debts. The creditor learns that both debts
are more than 90 days past due. Any two debts of this size that are
more than 90 days past due would disqualify the consumer under the
creditor’s established underwriting criteria. The creditor denies
the application on the basis that the consumer has a poor repayment
history on outstanding debts. The creditor has used medical information
in a manner and to an extent no less favorable than it would use comparable
non-medical information.
(B) A consumer indicates on an application for a $200,000 mortgage
loan that she receives $15,000 in long-term disability income each
year from her former employer and has no other income. Annual income
of $15,000, regardless of source, would not be sufficient to support
the requested amount of credit. The creditor denies the application
on the basis that the projected debt-to-income ratio of the consumer
does not meet the creditor’s underwriting criteria. The creditor has
used medical information in a manner and to an extent that is no less
favorable than it would use comparable nonmedical information.
(C) A consumer includes on
an application for a $10,000 home equity loan that he has a $50,000
debt to a medical facility that specializes in treating a potentially
terminal disease. The creditor contacts the medical facility to verify
the debt and obtain the repayment history and current status of the
loan. The creditor learns that the debt is current. The applicant
meets the income and other requirements of the creditor’s underwriting
guidelines. The creditor grants the application. The creditor has
used medical information in accordance with the exception.
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(iii) Examples of uses of medical information inconsistent
with the exception.
(A) A consumer applies for $25,000 of credit
and includes on the application information about a $50,000 debt to
a hospital. The creditor contacts the hospital to verify the amount
and payment status of the debt, and learns that the debt is current
and that the consumer has no delinquencies in her repayment history.
If the existing debt were instead owed to a retail department store,
the creditor would approve the application and extend credit based
on the amount and repayment history of the outstanding debt. The creditor,
however, denies the application because the consumer is indebted to
a hospital. The creditor has used medical information, here the identity
of the medical creditor, in a manner and to an extent that is less
favorable than it would use comparable non-medical information.
(B) A consumer meets with
a loan officer of a creditor to apply for a mortgage loan. While filling
out the loan application, the consumer informs the loan officer orally
that she has a potentially terminal disease. The consumer meets the
creditor’s established requirements for the requested mortgage loan.
The loan officer recommends to the credit committee that the consumer
be denied credit because the consumer has that disease. The credit
committee follows the loan officer’s recommendation and denies the
application because the consumer has a potentially terminal disease.
The creditor has used medical information in a manner inconsistent
with the exception by taking into account the consumer’s physical,
mental, or behavioral health, condition, or history, type of treatment,
or prognosis as part of a determination of eligibility or continued
eligibility for credit.
(C) A consumer who has an apparent medical condition, such as a consumer
who uses a wheelchair or an oxygen tank, meets with a loan officer
to apply for a home equity loan. The consumer meets the creditor’s established
requirements for the requested home equity loan and the creditor typically
does not require consumers to obtain a debt cancellation contract,
debt suspension agreement, or credit insurance product in connection
with such loans. However, based on the consumer’s apparent medical
condition, the loan officer recommends to the credit committee that
credit be extended to the consumer only if the consumer obtains a
debt cancellation contract, debt suspension agreement, or credit insurance
product from a nonaffiliated third party. The credit committee agrees
with the loan officer’s recommendation. The loan officer informs the
consumer that the consumer must obtain a debt cancellation contract,
debt suspension agreement, or credit insurance product from a nonaffiliated
third party to qualify for the loan. The consumer obtains one of these
products and the creditor approves the loan. The creditor has used
medical information in a manner inconsistent with the exception by
taking into account the consumer’s physical, mental, or behavioral
health, condition, or history, type of treatment, or prognosis in
setting conditions on the consumer’s eligibility for credit.
(1) In general. A creditor may obtain and use medical information pertaining to
a consumer in connection with any determination of the consumer’s
eligibility, or continued eligibility, for credit:
(i) To
determine whether the use of a power of attorney or legal representative
that is triggered by a medical condition or event is necessary and
appropriate or whether the consumer has the legal capacity to contract
when a person seeks to exercise a power of attorney or act as legal
representative for a consumer based on an asserted medical condition
or event;
(ii) To
comply with applicable requirements of local, state, or Federal laws;
(iii) To determine,
at the consumer’s request, whether the consumer qualifies for a legally
permissible special credit program or credit-related assistance program
that is:
(A) Designed to meet the special needs of
consumers with medical conditions; and
(B) Established and administered pursuant
to a written plan that:
(1) Identifies the class of persons that the program is designed
to benefit; and
(2) Sets forth the procedures and standards for extending credit or
providing other credit-related assistance under the program;
(iv)
To the extent necessary for purposes of fraud prevention or detection;
(v) In the case of
credit for the purpose of financing medical products or services,
to determine and verify the medical purpose of a loan and the use
of proceeds;
(vi)
Consistent with safe and sound practices, if the consumer or the consumer’s
legal representative specifically requests that the creditor use medical
information in determining the consumer’s eligibility, or continued
eligibility, for credit, to accommodate the consumer’s particular
circumstances, and such request is documented by the creditor;
(vii) Consistent with
safe and sound practices, to determine whether the provisions of a
forbearance practice or program that is triggered by a medical condition
or event apply to a consumer;
(viii) To determine the consumer’s eligibility
for, the triggering of, or the reactivation of a debt cancellation
contract or debt suspension agreement if a medical condition or event
is a triggering event for the provision of benefits under the contract
or agreement; or
(ix) To determine the consumer’s eligibility for, the triggering
of, or the reactivation of a credit insurance product if a medical
condition or event is a triggering event for the provision of benefits
under the product.
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(2) Example of
determining eligibility for a special credit program or credit assistance
program. A not-for-profit organization establishes a credit assistance
program pursuant to a written plan that is designed to assist disabled
veterans in purchasing homes by subsidizing the down payment for the
home purchase mortgage loans of qualifying veterans. The organization
works through mortgage lenders and requires mortgage lenders to obtain
medical information about the disability of any consumer that seeks
to qualify for the program, use that information to verify the consumer’s
eligibility for the program, and forward that information to the organization.
A consumer who is a veteran applies to a creditor for a home purchase
mortgage loan. The creditor informs the consumer about the credit
assistance program for disabled veterans and the consumer seeks to
qualify for the program. Assuming that the program complies with all
applicable law, including applicable fair lending laws, the creditor
may obtain and use medical information about the medical condition
and disability, if any, of the consumer to determine whether the consumer
qualifies for the credit assistance program.
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(3) Examples
of verifying the medical purpose of the loan or the use of proceeds.
(i) If a consumer applies for $10,000
of credit for the purpose of financing vision correction surgery,
the creditor may verify with the surgeon that the procedure will be
performed. If the surgeon reports that surgery will not be performed
on the consumer, the creditor may use that medical information to
deny the consumer’s application for credit, because the loan would
not be used for the stated purpose.
(ii) If a consumer applies for $10,000
of credit for the purpose of financing cosmetic surgery, the creditor
may confirm the cost of the procedure with the surgeon. If the surgeon
reports that the cost of the procedure is $5,000, the creditor may
use that medical information to offer the consumer only $5,000 of
credit.
(iii) A
creditor has an established medical loan program for financing particular
elective surgical procedures. The creditor receives a loan application
from a consumer requesting $10,000 of credit under the established
loan program for an elective surgical procedure. The consumer indicates
on the application that the purpose of the loan is to finance an elective
surgical procedure not eligible for funding under the guidelines of
the established loan program. The creditor may deny the consumer’s
application because the purpose of the loan is not for a particular
procedure funded by the established loan program.
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(4) Examples of obtaining and using medical information at the request
of the consumer.
(i) If a consumer applies for a loan
and specifically requests that the creditor consider the consumer’s
medical disability at the relevant time as an explanation for adverse
payment history information in his credit report, the creditor may
consider such medical information in evaluating the consumer’s willingness
and ability to repay the requested loan to accommodate the consumer’s
particular circumstances, consistent with safe and sound practices.
The creditor may also decline to consider such medical information
to accommodate the consumer, but may evaluate the consumer’s application
in accordance with its otherwise applicable underwriting criteria.
The creditor may not deny the consumer’s application or otherwise
treat the consumer less favorably because the consumer specifically requested
a medical accommodation, if the creditor would have extended the credit
or treated the consumer more favorably under the creditor’s otherwise applicable
underwriting criteria.
(ii) If a consumer applies for a loan by telephone and explains that
his income has been and will continue to be interrupted on account
of a medical condition and that he expects to repay the loan by liquidating
assets, the creditor may, but is not required to, evaluate the application
using the sale of assets as the primary source of repayment, consistent
with safe and sound practices, provided that the creditor documents
the consumer’s request by recording the oral conversation or making
a notation of the request in the consumer’s file.
(iii) If a consumer applies for a loan
and the application form provides a space where the consumer may provide
any other information or special circumstances, whether medical or
nonmedical, that the consumer would like the creditor to consider
in evaluating the consumer’s application, the creditor may use medical
information provided by the consumer in that space on that application
to accommodate the consumer’s application for credit, consistent with
safe and sound practices, or may disregard that information.
(iv) If a consumer specifically
requests that the creditor use medical information in determining
the consumer’s eligibility, or continued eligibility, for credit and
provides the creditor with medical information for that purpose, and
the creditor determines that it needs additional information regarding
the consumer’s circumstances, the creditor may request, obtain, and
use additional medical information about the consumer as necessary
to verify the information provided by the consumer or to determine
whether to make an accommodation for the consumer. The consumer may
decline to provide additional information, withdraw the request for
an accommodation, and have the application considered under the creditor’s
otherwise applicable underwriting criteria.
(v) If a consumer completes and signs
a credit application that is not for medical purpose credit and the
application contains boilerplate language that routinely requests
medical information from the consumer or that indicates that by applying
for credit the consumer authorizes or consents to the creditor obtaining
and using medical information in connection with a determination of
the consumer’s eligibility, or continued eligibility, for credit,
the consumer has not specifically requested that the creditor obtain
and use medical information to accommodate the consumer’s particular
circumstances.
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(5) Example of
a forbearance practice or program. After an appropriate safety
and soundness review, a creditor institutes a program that allows
consumers who are or will be hospitalized to defer payments as needed
for up to three months, without penalty, if the credit account has
been open for more than one year and has not previously been in default,
and the consumer provides confirming documentation at an appropriate
time. A consumer is hospitalized and does not pay her bill for a particular
month. This consumer has had a credit account with the creditor for
more than one year and has not previously been in default. The creditor
attempts to contact the consumer and speaks with the consumer’s adult
child, who is not the consumer’s legal representative. The adult child
informs the creditor that the consumer is hospitalized and is unable
to pay the bill at that time. The creditor defers payments for up
to three months, without penalty, for the hospitalized consumer and
sends the consumer a letter confirming this practice and the date
on which the next payment will be due. The creditor has obtained and
used medical information to determine whether the provisions of a
medically-triggered forbearance practice or program apply to a consumer.
